Here's a guide to US antitrust proceedings against big tech companies



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(Bloomberg) – The US government is intensifying its Big Tech antitrust analysis. Last week, the Department of Justice and the Federal Trade Commission announced the publication of an antitrust investigation on Apple Inc., Amazon.com, Facebook and Google, as well as Google. Alphabet Inc. by surprise, companies have been preparing for this moment for a while, hiring lawyers and lobbyists and pleading publicly. The story may be on their side: business splits are an important and rare business for the US government. AT & T, in 1982, was the last major dissolution of a monopoly. A federal judge ordered the split of Microsoft in 2000 after the Department of Justice sued the software company in 1998, a decision that had been overturned on appeal. In recent years, there has been a wave of calls to at least curb, even break up, technological companies considered by some to have become too big and too powerful in many ways. US Senator Elizabeth Warren has presented the most detailed arguments for the split and regulation of the four companies, but the Massachusetts Democrat is not the only one to speak out aggressively about the sector. Any formal investigation will take a long time. The scrutiny of Microsoft by the government lasted for years. While all parties are very interested, here is a glimpse of the issues that the government may want to address in its arguments, and some of the ways companies might argue.

The case: If perhaps best known for the iPhone, Apple's vulnerability lies in the App Store, which supports tools and games for mobile devices and is increasingly the key of the growth of society. Apple and Google control over 95% of all spending on mobile apps by US consumers, which means that most developers have to work with them to reach millions of smartphone users. Spotify Technology SA is among those who have long complained about Apple's 30% discount on each app, claiming that this equates to an effective tax on competitors. Some small developers sued Apple this week, claiming that the App Store was removing competition. The European Union is already preparing to review the case and Warren, in his proposal, said that the App Store should be separated from the rest of Apple because its own applications are in competition with those of external developers. Last month, the Supreme Court ruled that a big antitrust case, concerning the prices of the App Store, could take place. The Defense: The CEO, Tim Cook, is adamant that Apple is "in no way a monopoly." It highlights its share of the smartphone market in the United States, which is only about 30% and even lower on PCs. "We do not have a dominant position in any market," he said on Tuesday during an interview with CBS. Apple has long sought to distinguish itself from the rest of advanced technology, strengthening the security of its hardware and software and emphasizing that it does not monetize user data. With regard to the App Store, Apple has recently added a new section to its website to show the benefits it offers developers, such as the ability to reach a large global audience and manage information payment and identity, thus eliminating the frictions of the registration process. Apple, along with Google, has also highlighted its ability to filter out fake apps and malware, making its store more secure.FACEBOOK

The case: Facebook has been the subject of much criticism from the government over the last year because of the amount of data collected on some 2 billion users and its control of the content published on the platform. Digital advertising, where Facebook and Google together control about 60% of US spending, is also an area in which regulators may seek to found their cause. Warren and David Cicilline, Democratic Chair of the House's antitrust committee, suggested that Facebook and Facebook's WhatsApp acquisitions may have to be canceled. Chris Hughes, one of the co-founders of the company, recently explained in detail why he thought Facebook was a monopoly headed by a managing director whose "influence is astounding". Defense: Facebook CEO Mark Zuckerberg said that he welcomed the regulation, breaking with the company would not meet legislators' concerns about privacy and data. In fact, Facebook claims that its size allows it to do things that regulators want to see, such as better content monitoring, which would be much more difficult if Instagram or WhatsApp were separate companies. In addition, at a time when the government is worried about China's rise, Facebook says the United States needs its big tech companies. Breaking with Facebook would simply pave the way for Chinese technology companies, who do not share American values, to impose and dominate, Zuckerberg said. As for digital advertising, Facebook notes that it does not even lead the market. EMarketer sets its share at 22% of the US market in 2019. Facebook's advertising revenue was $ 55 billion last year, less than half of Google's. And other social media companies are posting a key demographic growth, like Snapchat, which had said earlier this year that it was now reaching 90% of 13 to 24 year olds in the United States.

The case: Google seems to be the company that is currently the subject of the most serious antitrust analysis, after the FTC closed a two-year investigation in 2013 without any action. The company holds a significant or majority market share in several important industries: research, digital advertising and mobile operating systems. And Google could face similar concerns to those of Apple for its own app store. According to EMarketer, Google controls approximately 37% of the digital advertising market in the United States, where it sells a large portion of the online real estate available to advertisers, such as search ads and pre-broadcast spots. YouTube videos. In the research sector, where Google holds 90% of the market, opponents say the company can manipulate rankings to favor its own lists. And Google's Android smartphone operating system is by far the most popular in the world, with 85% of the market, surpassing that of Apple with 14%, according to IDC. The company has already conducted several rounds of antitrust checks with the European Union and has been forced to pay billions of dollars in three different cases, including a record $ 5 billion fine for linking its search tools and from browser to Android. Google has also created many enemies among small businesses, ranging from media to advertising technology companies that are currently gathering evidence to help the Department of Justice, according to a person familiar with the situation. Defense: Google has well-defined arguments ready to be rejected, refined over many years of battle with the EU and the FTC. To counter the assertion of favoritism in the searches, Google says that it is only trying to more quickly reveal the best information for users. Google claims a $ 1.7 billion European fine for stifling competition in the online advertising market. Regulators' demand for Android will force Google to change its business model and start charging customers for software, rather than giving it to handset manufacturers for free, says the company. Google can also argue that the global nature of the Internet means that it does not have the power that its critics say, by naming companies such as Amazon and Tencent Holdings Ltd. The Internet has few barriers to entry, and if someone builds the argument says it's a better search engine or advertising system that customers can easily tip over . Google likes to say that "competition is just a click away".

AMAZON: The antitrust debate on Amazon is about the perceived dominance of online commerce by the retail giant, where it accounts for nearly 50% of online sales in the United States. As a retailer and market for third-party sellers, Amazon asked if it was using its weight and huge amount of sales data to get ahead of the smaller sellers – a problem the EU is investigating already. Warren suggested banning Amazon, like Apple, from competing with other market players. Regulators can also look at Amazon's execution practices, according to which the company handles all aspects of customer order fulfillment, from shipping to packaging and storage, according to Vox. The problem is that Amazon often charges much lower fees than competing platforms. Amazon Prime could also be a target. While consumers appreciate the fact that they can benefit from free shipping on a wide range of products and services with the subscription program, the FTC is interested in whether the bundling of these services allows Amazon to sell at prices lower than those of its competitors, according to Vox. The defense: Whenever Amazon buys another company from another sector, it sparks a wave of fear across the sector, whether it's grocery, pharmaceutical, or logistics. But Amazon claims to hold only a small percentage of the total retail market in the United States and face fierce competition, such as Walmart Inc. being able to keep prices low for consumers.

– With the help of Gerrit De Vynck, David McLaughlin, Mark Gurman, Spencer Soper and Kurt Wagner.

To contact the author of this story: Molly Schuetz in New York at [email protected]

To contact the editor responsible for this story: Andrew Pollack at [email protected], Tom Giles

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